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Pension Fund Partners with InvestTech to Plan for Front & Middle Office Internalization

Author: InvestTech

01 | 25 | 2017

pension fund implementation.jpgClient Challenge:

To respond more effectively to external risks and dynamic markets, a leading pension fund investment board focused on Total Fund risk management, decided to internalize the management of public market assets. Internalization of public market investments involves several aspects, such as establishing an appropriate governance and compliance framework, onboarding additional staff, implementing an order management system, a trading floor and, most importantly, the development of middle and back office capabilities to support day-to-day investment activities. Although internalization brings a structural change to the firm, management decided to partner with an experienced third-party service provider for middle and back office capabilities by establishing internal control and oversight functions. A third-party service provider allowed the pension fund manager to build capability and capacity in a gradual manner, ensuring an appropriate governance framework, systems, staff, and processes were in place.

The firm was challenged with formulating an internalization roadmap. There was a clear need to provide a milestone-based implementation plan derived from a holistic understanding of the core application architecture components that comprised the future state. Clarity was also needed to define the business process flows and data flows that drove those activities, along with dependencies, compliance, performance, risk processes, reference data, and the overall reporting framework.

InvestTech Solution:

InvestTech was engaged to develop a detailed implementation plan that served as a roadmap for internalization and the new front and middle office while enhancing back office capabilities to support day-to-day investment activities. The guiding principles of the plan were appropriate pacing, a focus on risk mitigation, and a project management and governance approach that supports accountability and transparency.

InvestTech partnered with the firm to lead multiple planning activities for the internalization program. The InvestTech team initiated and led working group sessions to review the overall business strategy and requirements for internalization. Meetings with key stakeholders representing portfolio management, trading, compliance, investment operations, risk and performance management, data management, and reporting led to a future state architecture driven by the future state business process, as well as data and reporting requirements. InvestTech provided front, middle, and back office vendor expertise, industry best practices, and hands-on solution knowledge. The InvestTech team derived a detailed list of interfaces and reports, along with effort estimates, to build a detailed project implementation plan and a comprehensive project charter.

InvestTech helps investment management firms like this realize greater efficiency in operations, systems, and data, allowing firms do what they do best - maximize returns for their funds and service their clients.

To discuss how InvestTech can help guide your implementation program and system architecture, contact us at 877.559.6077 or


Posted in: Outsourcing | Middle Office | Implementation | Front Office | Back Office